The audacity inside the Bush administration never ceases to amaze.
The latest example of chutzpah from Bush and co. is the announcement that
Joseph Kelliher, a former policy adviser with the Department of Energy who
currently serves as a commissioner on the Federal Energy Regulatory
Commission, the agency that controls the country's natural gas industry,
hydroelectric projects, electric utilities, and oil pipelines and has
played a critical role in the deregulation of those industries, will be
named by the White House Thursday to chair FERC.
President Bush had previously picked Rebecca Klein, the former Republican
head of the Texas Public Utilities Commission and a close friend of the
president, to chair FERC but red flags were raised recently during a
routine FBI background check on Klein which forced the president to choose
a new chairman at the last minute. The White House would not comment on
the FBI's probe on Klein. Klein did not return numerous calls for comment.
Still, news of Kelliher's appointment to chair FERC came late Wednesday as
a welcome surprise to many industry lobbyists and energy executives who
view him as a staunch supporter of the free-market principles of
deregulation and an advocate for eliminating regulatory restrictions that
interferes with the free-market, despite the fact those rules are in place
to protect consumers from energy price gouging and market manipulation
that took place prior to the Enron scandal four years ago and, to some
extent, is still somewhat routine in various parts of the country.
However, what's most troubling about Kelliher's appointment to head FERC,
a role in which his main priority will now be to protect consumers from
the manipulative tactics of the very industry he enjoys a cozy
relationship with, is the relentless lobbying of bigwigs in the energy
industry in early 2001, as a member of Vice President Dick Cheney's energy
task force, to help write President Bush's National Energy Policy in such
a way that would be financially beneficial to energy corporations-at the
expense of consumers.
The extent to which Kelliher's went to solicit key players in the energy
industry to help write the National Energy Policy became apparent in 2003
when Judicial Watch, a bipartisan watchdog group that sued Vice President
Dick Cheney to gain access to Cheney's list of industry insiders who
participated in secret meetings with Cheney's energy task force, won a
legal battle that forced the White House to release several hundred pages
of task force related documents.
One such document, a March 10, 2001 email
to energy lobbyist Dana
Contratto, was damning in that Kelliher
asked Contratto if he was "King" or "Il Duce" "what would you include in a
national energy policy, especially with respect to natural gas issues?"
Contratto responded
with a three-page list of ideas, many of which were included in the final
version of the energy policy.
"Kelliher's inappropriate relationship and communications with corporate
lobbyists not only tainted the administration's National Energy Policy,
but raise questions about the ability of Mr. Kelliher to be an impartial
voice at FERC," Public Citizen Director Joan Claybrook said in a Feb. 11,
2003 letter sent to the
Senate Committee on Energy and Natural Resources, in response to Bush's
announcement that Kelliher would fill one of the vacant seats on the FERC.
"FERC is weathering a storm of criticism for its deficient handling of the
west coast energy crisis, the Commission's failure to maintain any
effective enforcement of dozens of corrupt energy corporations, the
deteriorating relations between FERC and nearly half of the state utility
regulators who continue to be mistrustful of the Commission's
jurisdictional intentions, and the Commission's poor track record
protecting consumers," Claybrook said.
On another occasion, Kelliher sought out Stephen Craig Sayle, an Enron
Corp. lobbyist, to make similar recommendations. Sayle, former counsel for
the House Commerce Committee, sent Kelliher Enron's "dream list,"
including a recommendation that the administration commit to market-based
emissions trading, which was also used in administration's National Energy
Policy.
Sayle wrote Kelliher that the energy policy should also include "a
multi-pollutant regulatory strategy should be estimated for the power
generation sector including: Gradually phased in [mercury, nitrogen oxides
and sulfur dioxide emissions] reductions; Reform/replacement of NSR; Use
of market-based/emission trading programs; Inclusion of both existing and
new plants and equal treatment for both. The last bullet is the critical
one to ensure that: a) we encourage the new generation that is required b)
we ensure that the new technologies developed through DOE programs can
come into the market.
"Obviously, this is a dream list," Sayle said in the March 23, 2001 email
he sent to Kelliher.
"Not all will be done. But perhaps some of these ideas could be floated
and adopted."
Sayle also provided Kelliher with a PowerPoint presentation on behalf of
his other energy clients in the so-called Clean Power Group
, a consortium made up of
a handful of the country's biggest energy companies, including NiSource
Inc., Calpine Corp., Trigen Energy Corp., and El Paso Corp, whose mission,
according to the group's website, is to "streamline requirements under the
Clean Air Act for electric generating facilities while at the same time
making major reductions in air emissions."
The PowerPoint presentation, A Comprehensive Multi-Pollutant Emission
Control Strategy for Power Generation, summarized the Clean Power Group's
support of a "cap and trade" method in addressing emissions of mercury,
nitrogen oxides and sulfur dioxide from power plants, but included a
proposal for a voluntary cap on carbon dioxide. The Clean Power Group
stood to benefit from the initiative it urged Kelliher to get the White
House to adopt in that the companies could release more emissions under
its proposed plan than under the more restrictive rules the Clinton
administration had put in place.
After receiving Sayle's email and supporting material, Kelliher
recommended that President Bush "direct the Administrator of the
Environmental Protection Agency (EPA) to propose multi-pollutant
legislation that would establish a flexible, market-based program to
significantly reduce and cap emissions provide regulatory certainty to
allow utilities to make
modifications to their plants without fear of new litigation; provide
market based incentives, such as emissions-trading credits to help achieve
the required reductions," all of which the president approved and was
eventually incorporated into the National Energy Policy.
In fact, President Bush's "Clear Skies" initiative consists of many of the
bullet points laid out months earlier in Sayle's email to Kelliher.
In addition to Kelliher correspondence with Sayle, he also met with oil
and gas industry lobbyists who helped write executive orders that Kelliher
passed on directly to the White House. Two months later, the president
issued executive orders nearly identical to those Kelliher received from
the lobbyists months earlier.
---
Jason Leopold is the author of the explosive memoir, News Junkie, to be
released in the spring of 2006 by Process/Feral House Books. Visit
Leopold's website at
www.jasonleopold.com
for updates.
